Financial Statement Analysis and Security Valuation：财务报表分析与安全评估.ppt

Financial Statement Analysisand Security ValuationStephen H. Penman Prepared by Peter D. Easton and Gregory A. Sommers Fisher College of Business The Ohio State University With contributions by Stephen H. Penman – Columbia University Luis Palencia – University of Navarra, IESE Business School Recall: The Focus: Accounting-Based Valuation The task is to determine premiums over book value (or equivalently, the P/B ratio) What will future ROCE (residual earnings) be? Point of departure: Current ROCE and growth How will future ROCE and growth be different from current ROCE? Steps in Fundamental Analysis 1. Specify the future payoffs to be forecasted 2. Identify information that forecasts payoffs Within financial statements Outside of financial statements 3. Prepare forecasts (pro forma analysis) 4. Determine the cost of capital 5. Infer price from pro forma analysis: combine pro forma with cost of capital Forecasting and the Analysis of Current Profitability 1. Future ROCE (residual earnings) is the forecast target 2. Establish the present: Analysis of profitability Determine the current profitability (ROCE) and the factors that influence the profitability 3. Determine transition from present to future: Projecting future profitability Determine factors that influence future profitability and describe how the future will be different from the present Cutting to the Core:The Analysis of Profitability Cutting to the Core: ROCE Drivers ROCE is decomposed into drivers over three levels of analysis: Effects of Leverage Analysis of Operating Profitability Analysis of Net Borrowing Costs First-Level Breakdown: Analysis of Effects of Financial Leverage (FLEV) So, ROCE is a weighted return to operating activities and financing activities: or, RNOA = OI (After tax) / NOA (Return on Net Operating Assets) FLEV = NFO / CSE (Financial Leverage) NBC = NFE (after tax) / NFO (Net Borrowing Cost) SPREAD = RNOA – NBC (Operating Spread) How F